FM urges India Inc to invest, but businesspersons have genuine problems

For the 9th time, Finance Minister Nirmala Sitharaman has urged corporate India to overcome its hesitation to invest. Beseeching the captains of industry to pour their money into the country, she said, “I have a basket of things on which the government has delivered. So the question which remains unanswered… I hope there’s no more hesitation for the industry to invest further, to expand capacities, to produce more in India.”

She has a point. Her government has accepted a wide variety of demands made by the industry. It brought down the corporate tax rates, came up with production-linked investment or PLI schemes, and recently rationalised the goods and services tax regime. Besides, innumerable steps have been taken to enhance the ease of doing business and generally improve the investment climate.

But there is also a point that she and other economic policymakers miss: Despite all the supposedly pro-reforms decisions, the Narendra Modi government is generally seen as, to put it mildly, business-unfriendly. Tycoons and entrepreneurs alike feel that the government is not properly responsive; it responds according to its own convenience and timetable, not to the needs of businesses. Worse, they fear the imperious attitude of top ministers, including Sitharaman.

A year ago, the Bharatiya Janata Party’s IT Cell leaked a video clip which showed a restaurant chain owner of Tamil Nadu apologising to Sitharaman for the “crime” of publicly expressing concern over the complexities of GST on food items at a government event. In such a business environment, the government cannot be realistic in expecting an enthusiastic response from investors.

This is the crux of the problem. In an economy the size of India’s, investment requires confidence—confidence not only in growth prospects but also in the stability and fairness of the policy environment. When businesses feel they are operating under the shadow of arbitrary authority, confidence falters. Reforms on paper lose their appeal if the reality of entrepreneurs is marked by fear, unpredictability, and a lack of dialogue.

Moreover, the government’s tendency to weaponise investigative agencies adds to the climate of caution. Income tax raids, Enforcement Directorate probes, and sudden regulatory actions have created an impression that displeasing the ruling establishment could invite retribution. Even if such actions are justified in specific cases, the broader perception is corrosive. Business thrives in an atmosphere of trust; suspicion and coercion only encourage risk aversion.

The irony is that the Modi government, which proclaims itself as pro-reform and pro-investment, often undercuts its own efforts through its style of engagement.

Corporate India has indeed benefited from lower taxes and incentives, but without the intangible assurance of respect, stability, and partnership, these benefits fail to unlock animal spirits. Investors may prefer to hoard cash, repay debt, or wait for clearer signals rather than commit to ambitious expansions.

For the Finance Minister, then, the repeated appeals are unlikely to yield results unless accompanied by a change in approach. What India’s entrepreneurs seek is not merely fiscal concessions but genuine responsiveness, openness to dialogue, and a willingness to accept criticism without hostility. They want a government that treats them as collaborators in nation-building, not as subordinates who must constantly prove loyalty.

Unless that shift occurs, the paradox will persist: A government trumpeting reforms and taking liberalising actions but facing lukewarm investment response.